Cuomo’s Cronies: How Private School Billionaires Are Banking On Tax Credits From The Governor

Andrew Cuomo is probably the first Democratic governor in history to back tuition tax credits and taxpayer-funded subsidies to wealthy families who send their children to elite private schools.» read more

Cuomo’s “Parental Choice in Education Act” includes at least $70 million that will be taken from the paychecks of ordinary New Yorkers and redistributed to Cuomo’s billionaire buddies.

Cuomo’s plan is essentially a $150 million handout to private school parents, with $70 million available for the wealthiest families in New York state.[1]

The tax credit bill is being pushed at the end of a legislative session that has been an absolute boon for New York’s billionaire class, who Cuomo and his cronies have already showered with a private jet tax break, a tax break on new yacht purchases, and an insane property tax break on some of the priciest condos in the world.[2][3][4]

The latest Cuomo tax credit scheme will allow New York billionaires to receive a tax credit — essentially a check from the State — equal to 75% of their donations to qualifying donations, up to $1 million per individual.

At a time when public schools – particularly in low-income, rural and smaller urban areas – are already underfunded and neglected by state government, this large-scale reverse-Robin Hood giveaway to the wealthy and powerful is obscene.

Elizabeth Lynam, a budget expert for New York’s Citizens Budget Commission, called the bill “an extremely lucrative benefit likely to serve the state’s wealthiest taxpayers.” … only someone with a fancy accountant could easily take advantage of this tax bonus.[5]

Lead Editorial: May 22, 2015

And at a time when the interweaving of campaign cash contributions and governmental policymaking has led to scandal after scandal in Albany, it’s also obscene that Cuomo and some legislative allies are apparently planning to provide unnecessary and expensive benefits to their political supporters.

CUOMO’S TAXPAYER SUBSIDIESFOR PRIVATE-SCHOOL BILLIONAIRES

Many of Governor Cuomo’s top campaign contributors are already major donors to New York’s private schools. The new tax credit scheme could give them big benefits.

Under Cuomo’s latest billionaire subsidy project, these eight hedge fund managers—six of whom are billionaires—will be eligible for a tax credit of up to $1 million under the proposed language.

Two of these billionaires, Roger Hertog and Bruce Kovner, were the driving forces behind the Foundation for Opportunity in Education, which has been the major lobbying organization backing the tax credit bill.

Now they stand to gain hundreds of thousands of dollars, simply by continuing the same pattern of philanthropy they already in engage in.

And also alarming: Albany’s pattern of campaign cash contributions linked to favorable tax and policy treatment appears to be at play on the tax credit scheme.

These eight hedge fund mangers have given a total of $ 6,418,351.87 to New York candidates over the past decade, with $3,046,100 of that total going to Dean Skelos and the State Senate GOP; $968,137.82 going to Andrew Cuomo’s campaigns; and $190,450 to Sheldon Silver and the Assembly Democrats.

Daniel “Dan” Loeb

Image via: UK Telegraph

FAVORED ELITE PRIVATE SCHOOL: Fieldston

TUITION: $43,265 per year

DONATIONS TO ELIGIBLE ORGANIZATIONS: $5,900,000 in 2013

CASH TO CUOMO: $62,000

The Margaret and Daniel Loeb -Third Point Foundation gave $2.3 million to the Ethical Culture Fieldston School in New York City, in 2013. This is where Loeb’s children attend school.

Tuition for elementary school this year is $43,265, or roughly the price of two new Honda Civics. The foundation also gave $3.59 million to Success Academy Charter Schools the same year.[7]

William “Bill” Ackman

Image via: Forbes

FAVORED ELITE PRIVATE SCHOOL: Dalton

TUITION: $42, 960 per year

DONATIONS TO POTENTIALLY ELIGIBLE ORGANIZATIONS: $500,000 in 2012

CASH TO CUOMO: $96,000

Ackman’s Pershing Square Foundation gave at least $450,000 to Dalton in 2012, a private school in New York City where the 2015-16 tuition is $42,960.[9]

James “Jim” Chanos

The Chanos Family Charitable Foundation – Contributions to The Hewitt School of $5,000 in 1999, a private girls’ school, 2014-15 tuition $42,500. Contribution of $250,000 to The Browning Schools, a private boys’ school, in 2002, and another $60,000 the following year.[12]

Roger Hertog

Photo via: Zimbio.com

FAVORED ELITE PRIVATE SCHOOL: Solomon Schecter School of Westchester

TUITION: $21,500 per year

DONATIONS TO POTENTIALLY ELIGIBLE ORGANIZATIONS: $155,000 in 2014

CASH TO CUOMO: $35,000

Hertog Foundation gave $25,000 in 2014 to the Solomon Schechter School of Westchester, where tuition for the 2015-16 ranges from $21,500 a year for kindergarten to $37,200 in high school. The foundation also gave $500,000 to pro-charter Families for Excellent Schools; $100,000 to Success Academy Charter Schools; $30,000 to Student Sponsors Partners.[14] Hertog has also donated $145,000 to the Education(al) Fund in Ballston Spa, NY, between Jan. 1, 2012 and May 10, 2015. The organization been lobbying for at least the last three years for an education tax credit. He also sits on board of Foundation for Opportunity in Education, a pro tax credit/charter foundation that has been the driving force behind Cuomo’s tax-credit bill.

James Dinan

The Dinan Family Foundation recently gave $26,500 to Student Sponsorship Partners, $25,500 to Horace Mann $25,000 to Sinai Schools, $5,000 to Harlem Village Academies, $150,000 to Prep for Prep – at least $212,000 to entities potentially eligible to receive deductible donations under the Governor’s proposed voucher bill.

The Foundation has also contributed to the Robin Hood Foundation over the years. Also a contributor to Sinai Schools, a collection of private Jewish Schools focusing on kids with special needs.[17]

Gregg Hymowitz

Image via: New York Social Diary

FAVORED ELITE PRIVATE SCHOOL: Riverdale Country School

TUITION: $38,600 per year

DONATIONS TO POTENTIALLY ELIGIBLE ORGANIZATIONS: $130,159 in 2013

CASH TO CUOMO: $116,000

Hymowitz Family Foundation Trust – Riverdale Country School in Riverdale, NY, $130,159 “unrestricted grant to further the organizations (sic) exempt purpose” . Riverdale Country School is a private school, tuition for prek-12 this year is $38,600. The school has been funded through this foundation in years prior.[19]

Michael Leffell

FAVORED ELITE PRIVATE SCHOOL: Solomon Schecter School of Westchester

TUITION: $25,000 per year

DONATIONS TO POTENTIALLY ELIGIBLE ORGANIZATIONS: $10,800 in 2011

CASH TO SENATORS: $68,500

Leffell has donated $33,400 to the Education(al) Fund in Ballston Spa, NY, between Jan 1., 2012 and May 10, 2015. He is also on board of Foundation for Opportunity in Education, a pro tax credit/charter foundation.

Andrew Cuomo is probably the first Democratic governor in history to back tuition tax credits and taxpayer-funded subsidies to wealthy families who send their children to elite private schools.

Such programs have already been passed in Republican-controlled legislatures and municipalities, including in Pennsylvania, during the reign of Governor Tom Corbett—the least popular governor in the last twenty years.[22]

It’s clear why Republican governors have been so quick to support private school tax credit bills—the legislation was created by the American Legislative Exchange Council, the legendary conservative group that helps corporations buy influence in state legislatures.

What is not clear is why Andrew Cuomo would support school-privatization policies previously associated with the most conservative legislators in the country.

Perhaps it’s because the “Parental Choice in Education Act” is a lucrative handout to New York’s wealthiest 1% — including some of Cuomo’s biggest campaign supporter and political allies — with a few crumbs sprinkled in for parochial schools to provide for better optics and fawning, press-ready photo opportunities.

If New York passes Cuomo’s latest billionaire subsidy bill, New Yorkers may find themselves in the same predicament as many of the states that have already passed similar measures: their tax dollars will end up funding regressive, anti-gay schools, or schools that teach shockingly un-educational curriculum based on religious extremism.

Alarmingly, both portions of Cuomo’s tax credit bill—comprising $140 million of Cuomo’s $150 million proposal— could potentially be directed to schools that undermine science education and LGBT rights.

In North Carolina, the Myrtle Grove Christian School, which banned LGBT students and students from LGBT families from enrolling, would have been eligible for tax credit financing in 2014, until public pressure caused the school to renounce the funding.[23][24]

According to an investigation by Rolling Stone, at least 115 religious schools in Georgia received taxpayer funded tax-credit subsidies while simultaneously maintaining anti-gay policies.[25]

In Louisiana, 1/6th of the eligible private schools in 2012 taught curriculums that rejected evolutionary science in favor of creationism.[26] Curriculum materials used in Louisiana private schools eligible for tax-credits similar to those proposed by Cuomo taught that humans and dinosaurs walked the earth at the same time, that slave-owners were mostly decent people, and that “God used the Trail of Tears to bring many Indians to Christ.”[27]

Multiple schools in Wisconsin, which has a voucher program similar to the tax-credit scheme proposed by Cuomo, teach a curriculum written by a company called A Beka Book.[28] A Beka Book materials teach that homosexuality is the result of the belittlement of “fathers and husbands” at the hands of the media.[29] Other books teach that sexually transmitted diseases are caused by being disobedient to God.[30]

Nothing in the latest legislation appears to restrict the payment of tax credits to donors who back schools that teach intolerance, bigotry, or junk science.

Cuomo’s latest tax-credit scheme is bad tax policy, bad education policy and bad news for taxpayers. But it’s great for billionaires and hard-right conservative activists. Lawmakers have a clear choice in front of them as this legislative session draws to a close.

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